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  • ALLIED SYSTEMS HOLDINGS, INC. Page 11 UNITED STATES BANKRUPTCY COURT2 DISTRICT OF DELAWARE3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x4 In re:5 Chapter 116 ALLIED SYSTEMS HOLDINGS, INC., Case No. 12-11564(CSS)78 Alleged Debtor.9 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x10 In re:11 Chapter 1112 ALLIED SYSTEMS LTD. (L.P.), Case No. 12-11565(CSS)1314 Alleged Debtor.15 - - - - - - - - - - - - - - - - - - - - - - - - - - - - x1617 United States Bankruptcy Court18 824 North Market Street19 Wilmington, Delaware2021 May 22, 201222 4:13 P.M.232425 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 21 B E F O R E :2 HON CHRISTOPHER S. SONTCHI3 U.S. BANKRUPTCY JUDGE45678910111213141516171819202122232425 ECR OPERATOR: LESLIE MURIN VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 31 HEARING re Expedited Motion of Petitioning Creditors for the2 Appointment of a Trustee Pursuant to 11 U.S.C. §§ 105(a),3 1104(a)(1) and 1104(a)(1)(Filed May 17, 2012, Docket No. 13)45 HEARING re Petitioning Creditors Motion Pursuant to Del.6 Bankr. L.R. 9006-1(e) for an Order Shortening Time for7 Notice of the Hearing to Consider the Expedited Motion of8 Petitioning Creditors for the Appointment of a Trustee9 Pursuant to 11 U.S.C. §§ 105(a), 1104(a)(1) and10 1104(a)(2)(Filed May 17, 2012, Docket No. 12)111213141516171819202122232425 Transcribed by: William J. Garling VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 41 A P P E A R A N C E S :2 TROUTMAN SANDERS, LLP3 Attorney for Allied Systems Holdings, Inc., Debtor4 600 Peachtree Street, NE, Suite 52005 Atlanta, GA 3030867 BY: EZRA H. COHEN, ESQ. (TELEPHONIC)8 JEFFREY W. KELLEY, ESQ. (TELEPHONIC)9 MICHAEL JOHNSON, ESQ. (TELELPHONIC)1011 RICHARDS, LAYTON & FINGER, P.A.12 Attorney for Allied Systems Holdings, Inc., Debtors13 One Rodney Square14 920 North King Street15 Wilmington, DE 190811617 BY: CHRISTOPHER M. SAMIS, ESQ. (TELEPHONIC)1819 OFFICE OF THE UNITED STATES TRUSTEE20 Attorney for the United States Trustee21 844 King Street, Suite 220722 Lockbox 3523 Wilmington, DE 198012425 BY: DAVID L. BUCHBINDER, ESQ. (TELEPHONIC) VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 51 SCHULTE, ROTH & ZABEL, LLP2 Attorney for BDCM Opportunity Fund II, LP, Creditor3 919 Third Avenue4 New York, NY 1002256 BY: ADAM C. HARRIS, ESQ. (TELEPHONIC)7 ROBERT J. WARD, ESQ. (TELEPHONIC)89 YOUNG CONAWAY STARGATT & TAYLOR, LLP10 Attorney for Yucaipa, Interested Party11 Rodney Square12 1000 North King Street13 Wilmington, DE 198011415 BY: MICHAEL R. NESTOR, ESQ. (TELEPHONIC)1617 LATHAM & WATKINS, LLP18 Attorney for Yucaipa, Interested Party19 355 South Grand Avenue20 Los Angeles, CA 900712122 BY: ROBERT A. KLYMAN, ESQ. (TELEPHONIC)232425 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 61 KASOWITZ, BENSON, TORRES & FRIEDMAN LLP2 Attorney for Yucaipa, Interested Party3 Two Midtown Plaza, Suite 15004 1349 West Peachtree Street, N.W.5 Atlanta, GA 3030967 BY: DAVID E. SPALTEN, ESQ. (TELEPHONIC)89 KASOWITZ, BENSON, TORRES & FRIEDMAN LLP10 Attorney for Yucaipa, Interested Party11 1633 Broadway12 New York, NY 100191314 BY: DAVID E. ROSS, ESQ. (TELEPHONIC)1516 APPEARED TELEPHONICALLY:17 ROBERT WARD, ESQ.18 MICHAEL JOHNSON, ESQ.19202122232425 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 71 P R O C E E D I N G S2 THE CLERK: All rise.3 THE COURT: Please be seated.4 Good afternoon, counsel, this is Judge Sontchi and5 were here on a status conference in Allied System Holdings6 and Allied Systems Limited.7 There are quite a few people on the telephone and8 I would urge you to please -- to mute your phones if youre9 not actively speaking, to do your best not to talk over each10 other, and to remember to identify yourself prior to every11 time you speak.12 And I would like to start by hearing from the13 petitioning creditors.14 MR. HARRIS: Good afternoon, Your Honor.15 Adam Harris and Robert Ward from Schulte, Roth &16 Zabel.17 Your Honor, would you like to take appearances18 from everybody before we get started or --19 THE COURT: That would take -- that would take20 longer than the hearing.21 MR. HARRIS: Thank you, Your Honor.22 Your Honor, we filed the involuntary petitions23 last week as Your Honor knows, and the summons have been24 served upon the alleged debtors in the case -- in the cases,25 I should say. VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 81 In conjunction with the filing of the2 involuntaries weve also filed a motion for the appointment3 of a trustee, as well as a motion of entering an order4 shortening time -- to set a hearing with respect to that5 motion.6 Last night, Your Honor, I believe, received a7 response to the motion shortening time by the alleged8 debtors as well as a motion to transfer venue of the cases9 to the Northern District of Georgia.10 Your Honor, since the responses were filed last11 night, since the involuntaries were filed last week, weve12 had an opportunity to speak with counsel for the alleged13 debtors, Mr. Collins from Richards Layton, as well as14 Messrs. Kelley and Cohen from Troutman Sanders.15 Your Honor, the purpose of our suggestion of a16 status conference, which we brought up late last week or17 Monday, I cant remember which it was, was that we thought18 it would be helpful to Your Honor in making decisions about19 entering orders shortening time or otherwise setting20 calendars to hear from the various parties as to the issues21 that were likely to be brought before the Court and on which22 the Court would be asked to rule.23 Given certain of the statements that were made in24 the alleged debtors filings last night in some instances in25 the redacted portion -- so Im not going to talk about them VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 91 specifically -- I think that the -- many of the issues2 related to whether orders could be -- relief could be3 entered based upon the involuntary petitions and the issues4 under 303 have in some sense been muted by intentions of the5 company as expressed in their filings. And, obviously, I6 would like to let Mr. Collins or his co-counsel from7 Troutman Sanders address those issues.8 To the extent those intentions are carried out in9 the manner that they were described in both the filings and10 as we discussed them with the alleged debtors counsel11 today, we think that the cases can move forward on --12 hopefully on a more cooperative and consensual track. And13 that there might not need to be any particular order or14 scheduling order entered by Your Honor relative to our15 trustee motion at this time.16 I would like Your Honor to hear from Mr. Collins17 or his co-counsel from Troutman Sanders on those issues and18 would then like to have an opportunity to speak thereafter19 based upon what they say.20 THE COURT: All right. Let me hear from the21 purported debtor.22 MR. SAMIS: Good afternoon, Your Honor.23 This is Chris Samis from Richards, Layton & Finger24 on behalf of the alleged debtors.25 Your Honor, with me on the phone are my co-counsel VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 101 in this matter, Jeffrey Kelley, Ezra Cohen, and Michael2 Johnson, all with the Troutman Sanders firm.3 Your Honor, pro hac vice motions are in process4 for these gentlemen and we expect to submit them shortly.5 In advance of these motions being reviewed by the Court and6 pro hac orders being entered, for the limited purpose of7 todays status conference, I would request that the Court8 permit them to speak.9 THE COURT: Id be happy to do so, and Id like to10 express my personal thanks to you, Mr. Samis, for your11 yeomans work in getting the Court the documents I needed to12 be prepared for today, but Ill hear from them.13 MR. SAMIS: Your Honor, no problem. I was happy14 to do so, and I also -- wanted to thank Your Honor for15 accommodating us this afternoon in reviewing a pretty16 voluminous docket on very short notice for this status17 conference.18 Your Honor, just very briefly, with respect to why19 were here today, the alleged debtors believe its20 appropriate to use this status conference to address not21 only the motion to shorten on the trustee motion, but more22 importantly in our view, the scheduling of our own venue23 transfer motion, which we think deals with a real gating24 issue in these cases.25 So, Your Honor, with that as background, I turn VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 111 the balance of our presentation over to Mr. Kelley.2 THE COURT: Very good.3 Thank you.4 MR. KELLEY: Good afternoon, Your Honor.5 This is Jeff Kelley with Troutman Sanders in6 Atlanta. Ezra Cohen is also, I think, on the line with us7 now, but Ill do all the speaking, I believe.8 By way of background, both Ezra and I were counsel9 to Allied in the first Chapter 11 case of Allied in front of10 Judge Mullins, here in Atlanta.11 Your Honor, the filing of these petitions has12 caused what Allied believes to be, as we set forth in our13 papers, some unnecessary disruptions and potentially14 significant damage to Allieds business and its value.15 Our perspective on how this possibly could have16 happened and the motives may be driving the petitioning17 creditors is set forth in particular in the redacted18 portions of our response to the motion to shorten time for19 the hearing on the appointment of a trustee where we, among20 other things, argue that we dont think that any emergency21 has been shown and that the issues raised have been the22 subject of the State Court litigations among the various of23 the parties going back several years.24 However, Your Honor, due to the filing thats25 taken place, their -- the actions in this involuntary VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 121 petition -- involuntary petitions being filed, it does2 appear very likely the subject to bankruptcy -- subject the3 board approval, I should say, Allieds board approval, that4 Allied will likely, in the future, convert these cases to5 voluntary Chapter 11 cases, but the timing is not ripe today6 for that. Allied needs a little time to make sure it has7 adequate financing and cash collateral before it files its8 other subsidiaries, its many other subsidiaries, along with9 these two. Those subsidiaries are identified in our10 response.11 But, Your Honor, Allieds preferred forum is12 Atlanta. Thats where, as I mentioned, Allieds first case13 was administered by Judge Mullins. That case is still open.14 Although its ready to be closed, it is still open. The15 reasons that we think a transfer is appropriate are set16 forth in the venue motion. Im not going to argue that at17 this point, but its primarily the convenience of Allieds18 very, very stretched-thin executive team, which is located19 in Atlanta, not to mention Judge Mullins familiarity with20 most of the players in this case.21 The first case was a very large case by Atlanta22 standards, very intense, a lot of activity in that case, and23 Judge Mullins had ample opportunity to learn a lot about24 Allied, and for that matter, Yucaipa.25 So, Your Honor, we ask that you rule on the venue VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 131 transfer motion as a gating matter before anything else gets2 ruled on in this case, because we take the position and3 believe and submit, that everything else that happens in4 this case, including the trustee motion, should heard by the5 Court that ultimately has the case, whether is that Your6 Honor or a bankruptcy judge in Atlanta, probably Judge7 Mullins.8 Your Honor, due to the petitioning creditors9 actions we need to get these cases moving along in the right10 direction, so we respectfully ask that the Court give11 Allieds transfer motion consideration as soon as the12 Courts schedule permits, and thats our position as to the13 status of matters and proposed scheduling.14 THE COURT: Well, the decision is Judge Mullins;15 is it not?16 MR. KELLEY: Would that be -- are you referring,17 Your Honor -- this is Jeff Kelley, again -- to Bankruptcy18 Rule 10014 (sic)?19 THE COURT: (Indiscernible - 4:22:23).20 MR. KELLEY: Yes, we did raise that, Your Honor,21 in our papers, and technically that is correct because the22 first case is still pending.23 THE COURT: Okay.24 Anyone else?25 MR. HARRIS: Adam Harris -- sorry to interrupt. VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 141 I guess that would depend on whether the company2 that was the subject of the case there is, in fact, the same3 legal entity, which is the subject to the involuntary.4 My understanding is that Allied Systems Holdings,5 Inc. is a successor by merger to what was the reorganized6 debtor, I guess, but it is not the same legal entity that7 was the debtor in the case down there.8 Now, that all being said, Your Honor, weve had a9 conversation with Mr. Kelley and Mr. Cohen and Mr. Samis10 earlier today where we told them that we would be happy to11 sit with them and try to better understand their views on12 Atlanta as an appropriate venue versus -- versus Delaware13 and take into account and discussing with them the interests14 of all of the parties involved here, only one of which15 really is located in Atlanta, the rest of whom are located16 mostly in the Northeast corridor, but also in California and17 Detroit and elsewhere.18 And to the extent the Court is inclined to set a19 hearing in connection with the venue transfer request, we20 would only ask that we be given an opportunity to get with21 the purported debtors and others to discuss this, and that22 if a hearing need be held, that it would be held sometime23 late next week rather than between now and the Memorial Day24 weekend. I dont think that would prejudice the debtors at25 all given the timetable they seem to be operating on VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 151 relative to their thoughts on when they would ultimately,2 potentially convert these cases to voluntary Chapter 11s.3 THE COURT: Do I take it --4 MR. HARRIS: I --5 THE COURT: Im sorry.6 Do I take it that you would -- were that to be the7 case, you would hold your trustee motion in abeyance pending8 the decision on the venue motion?9 MR. HARRIS: We would, Your Honor.10 THE COURT: Okay.11 MR. NESTOR: Yes, Your Honor. Michael Nestor ,12 Young Conaway on behalf of Yucaipa, and Im on with Robert13 Klyman from Latham & Watkins.14 May we be heard briefly?15 THE COURT: Im sorry. I missed your client,16 Mr. Nestor.17 MR. NESTOR: Its Yucaipa.18 THE COURT: Oh, very good.19 Yes, Mr. Klyman.20 MR. KLYMAN: Thank you, Your Honor.21 For the record, Robert Klyman of Latham & Watkins,22 LLP, on behalf of Yucaipa.23 Your Honor, by way of background, Yucaipa is the24 largest lender and shareholder and member of the board of25 the alleged debtors and we have a direct economic material VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 161 -- economic interest in the outcome.2 We would echo what Mr. Kelley said, that its,3 from our vantage point, very important to have the venue4 determined first and foremost. If Your Honor determines5 that its appropriate for Judge Mullins to make the initial6 decision we would be happy to go down there and get that7 teed up on an expedited basis.8 I believe that the debtor chose to file the motion9 to transfer venue before your Court only because whats left10 to be resolved in Atlanta is a motion to close the case, but11 under the plain reading of the statute that may be the12 more appropriate place for determination as to venue. We13 just thought that since there was a trustee motion on an14 expedited basis filed this was the natural venue to first15 raise the issue. But as I said, at least from Yucaipas16 perspective, having the issue determined by Judge Mullins17 would be a perfectly fine result on an expedited basis.18 I would just add two other points. The first is19 while my colleague, Mr. Harris, says that he needs more time20 to sit down with the debtors, and maybe Yucaipa to21 understand all there is about the venue in Atlanta, the fact22 of the matter is that they did have sufficient time to do23 that before they filed an involuntary. The filing of the24 involuntary was their timing, not the debtors, and the25 reasons why venues appropriate in Atlanta, I believe, are VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 171 spelled out in great detail in the motion to transfer venue.2 So, although on behalf of Yucaipa, and I believe3 Mr. Kelley would echo the sentiment, we are always happy to4 sit down with Black Diamond and Mr. Harris. We do not5 believe that that is a reason to delay a resolution of the6 venue motion.7 The alleged debtors are suffering, you know,8 potential business issues while they are in limbo. They9 want to tee up a process for obtaining financing and getting10 on with the case in a manner that preserves value, both for11 the enterprise as a whole and the secured lenders, including12 Black Diamond in particular.13 We would also ask Your Honor that while the venue14 issue is being decided that Black Diamond actually withdraw15 the trustee motion without prejudice with the ability to16 refile it on an expedited basis if theyd like, with all17 parties reserving their rights with respect to whether or18 not the request for expedited hearing is appropriate before19 whatever judge ultimately hears the case.20 The -- its, you know, tough enough for the21 business and management to be dealing with an involuntary22 and scrambling to catch up to make sure that the business23 doesnt suffer the unnecessary stigma of a trustee motion,24 which is not going to be heard for some period of time, is25 something that, at least on Yucaipas behalf, we would like VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 181 to avoid hanging over when we meet with customers and2 vendors and the like, recognizing that this would not3 prejudice Black Diamonds ability to refile at any time in4 the future.5 THE COURT: Well, I think that from what I had6 read in the papers Black Diamond might take issue with your7 comment that youre willing to sit down and talk to them,8 but that wasnt my impression from what I read.9 All right. Does anyone else care to make10 comments?11 MR. BUCHBINDER: Your Honor, this is Dave12 Buchbinder from the U.S. Trustees Office.13 We are concerned about Rule 1014(b) and how it14 applies here. If we do have the same debtor the rule would15 seem to imply that anything pending here is stayed until the16 Court in Atlanta rules otherwise or orders otherwise.17 To the extent that an issue has been raised as to18 whether or not this is the same debtor, Rule 1014(b),19 Subdivision 4, says that if petitions commencing cases are20 filed in different districts by regarding or against and Sub21 4 is a debtor and an affiliate, if the new debtor is a22 successor they may or may not be an affiliate.23 And so what Im getting at is I agree with the24 parties that the threshold matter here is a ruling on either25 Rule 1014(b)s applicability or a ruling on the venue VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 191 motion, and it may be that the venue motion, if it were to2 proceed here, requires the consent of the judge in Atlanta3 because thats the case first filed, and the last thing I4 think any of the parties on line would want would be a5 ruling from this Court and then someone going back to6 Atlanta saying the ruling here was void because of Rule7 1014(b).8 THE COURT: Thank you. I understand your9 position.10 I think its less than clear whether this Court11 has, without authority, to enter any order pending that12 decision as opposed to simply making a decision on venue,13 but I certainly appreciate your (Indiscernible - 4:30:31) I14 think thats the most sophisticated response to some of the15 complications that the Court is looking at in this case.16 Anyone else?17 MR. KELLEY: Yeah, this is Jeff Kelley, again, for18 the alleged debtors.19 I -- I would will also like to reiterate and state20 for the alleged debtors that were certainly willing -- I21 dont know about -- you know, we are not Yucaipa, and22 whatever was alleged and whether its true or not about23 Yucaipas willingness to cooperate -- of course the alleged24 debtors are willing to sit down and cooperate and talk with25 their lenders at any time. We dont have to be subject to VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 201 an involuntary bankruptcy petition to do that; were always2 willing to do that, and we need -- and we know we need to3 cooperate.4 So, I just wanted to address the cooperation5 issue, and to reiterate that however we do it, we would like6 to try to get a decision as soon as the Courts calendar7 permits on the venue transfer motion.8 If I needed to go file something in front of Judge9 Mullins I would. I dont want to unduly complicate this by10 doing that. We did think that under the circumstances of11 this case, this was the appropriate place to bring up the12 venue transfer motion.13 THE COURT: All right. Whats the debtors14 position -- presuming I will schedule the venue transfer15 motion to be heard expeditiously -- whats the debtors16 position on when that should occur?17 MR. KELLEY: As soon as Your Honors calendar18 permits.19 THE COURT: Okay. Can I --20 MR. KELLEY: (Indiscernible - 4:32:09.)21 THE COURT: -- can I transfer the case before22 entry of an order for relief?23 MR. KELLEY: We believe you can, Your Honor. This24 is a -- under the strict ruling reading of 303(b) a case was25 commenced -- VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 211 THE COURT: Uh-huh.2 MR. KELLEY: -- when the petitions were filed, and3 we are seeking -- we filed a motion seeking the transfer of4 a case.5 THE COURT: Mr. Harris, anything?6 MR. HARRIS: Your Honor, I mean I understand the7 strict reading -- the way theyre looking at it; on the8 other hand, what would be the purpose of transferring venue9 if the only thing the Court who is receiving it would do10 would be then to be ruling on whether or orders for relief11 should be entered or not unless theres going to be a ruling12 that Your Honor can make if theres going to be a contested13 involuntary. If theres not going to be a contested14 involuntary and the debtors were to affirm that, then, you15 know, there wouldnt be any issue with dealing with the16 venue transfer in my mind.17 But there seems to be a timing issue in some18 respects as to the desire to go to a forum and then deal19 with the involuntary and conversion at a later date, and not20 even, frankly, confirmed, but they said subject to board21 approval -- and I think the word used was "likely" convert,22 where that would basically put us in a position of23 litigating the involuntaries in a jurisdiction in which we24 didnt file them.25 THE COURT: All right. So, what Im -- Im going VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 221 to see if I can make sure I understand what Im hearing.2 And what Im hearing from Mr. Harris is, at least3 for the immediate future, hes not pressing the trustee4 motion, and again, would like to open and well continue in5 a dialogue concerning how this case will go forward, whether6 it go forward here in Delaware or whether it get filed or7 transferred to some other jurisdiction.8 What Im hearing from the debtor is that -- and9 its supporters -- that the only thing they want me to decide10 what venue the case should (indiscernible - 4:34:18) once11 that decision has been made theyll be in a position,12 perhaps, to make a decision on whether agree to agree to an13 entry of order for relief or not.14 Is that right -- I want to make sure -- is that a15 gating issue or do you (indiscernible - 4:34:39)?16 MR. KELLEY: This is Jeff Kelley.17 Its my opinion that the two are unrelated in my18 view. Allied Systems needs to make a decision, and the19 (indiscernible - 4:34:50), Your Honor, is I just dont have20 the board sitting here with me, that -- which because of the21 filing of the involuntary petitions we will be consenting,22 we just do not wish to have a crash landing into a voluntary23 Chapter 11. We want to make sure that our financing is all24 lined up and we want to do it as neatly as possible with the25 right message to all of our constituencies, many of whom are VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 231 on the phone.2 So, I dont think the two are related, Your Honor.3 The fiduciary decision of deciding to go ahead and enter4 into a voluntary 11 is independent of the venue motion.5 THE COURT: Right.6 MR. KELLEY: We just -- we wanted to make -- to7 bring the venue motion before your Court in a very early8 time to let you know that it was an issue. We were faced9 with an emergency filing for appointment of a trustee. We10 didnt think that if Your Honor was not going to keep the11 case, not presupposing at all what Your Honors decision12 will be, that Your Honor would want to be the one deciding13 whether to appoint a trustee --14 THE COURT: Okay.15 MR. KELLEY: -- so we brought this motion to your16 attention promptly.17 THE COURT: Very good. And I understand you would18 like Mr. Nestor to withdraw, but, of course, I cant make19 him withdraw it.20 I will offer a comment. I think as presented in21 its -- or in the papers that the trustee motion is not22 particularly persuasive, of course, all those motions23 require a development of facts and its somewhat difficult24 to figure it out from the actual papers.25 What Id like to do in this case and what I will VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 241 do is lets have a hearing on the venue transfer motion on2 Thursday, May 31st. (Indiscernible - 4:36:44 reschedule3 that, Im available throughout the day with -- I do have to4 take a break in the late morning, so I wont be available5 until say 10:30, if we started in the morning, or Im6 available 12:30 going forward whether we take a break or we7 start in the afternoon.8 I know there are a lot of people who are going to9 be interested and when the timing on that is going to be, so10 if people want me to simply state a time I will and well11 basically try to figure it out.12 But, I think regardless of whether this is going13 to be withdrawn or filed an 11 or what have you, I have a14 responsibility to decide very quickly where -- what the15 venue should be. And it very well may be at the end of that16 Mullin hearing my answer is going to be, I cant make that17 decision because Judge Mullins is going to make that18 decision.19 But if it is appropriate for this Court to have a20 hearing on transfer venue, then one of the possibilities may21 be that this Court doesnt have the power, or the22 possibility is this Court decides it has that power and23 makes a decision. Either way, I need to hear from the24 parties and the facts and law to make that call.25 Is there any comment on that? VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 251 MR. HARRIS: Your Honor, its Adam Harris.2 Thats all fine with us, just two3 questions/comments.4 One is, can we set a time for filing responses of5 maybe a day before the hearing? And that ties into my6 suggestion that we hold the hearing, if Your Honors7 available, at 2 oclock in the afternoon. That way parties8 can get in and out the same day, including potentially9 flying up from Atlanta to the extent they need to do that,10 rather than doing something early in the morning where11 people may feel compelled to come in the night before --12 just the cost issue. I think if we do the 2 oclock, then13 we can try to get the responses by noon the day before. If14 thats too tight, we can probably do it a little sooner than15 that.16 THE COURT: All right.17 MR. KELLEY: Your Honor --18 THE COURT: Go ahead. Sorry, go ahead.19 MR. KELLEY: -- this is Jeff Kelley.20 The date of the hearing is fine, and we would ask21 that, if possible, the response date be set a little sooner22 than that to give us a little bit more time to read it, and23 we appreciate and agree with Mr. Harris suggestion that the24 hearing start at 2 oclock.25 THE COURT: All right. VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 261 MR. HARRIS: Your Honor, we can do the response2 5:00 p.m., Tuesday, the 29th, I guess that would be.3 THE COURT: Well, thats what I was about to say.4 All right. Well have a hearing May 31st at5 2:00 p.m. on the venue motion.6 Responses are due to -- by no later than 5:00 p.m.7 on the 29th, which is Tuesday. (Indiscernible - 4:39:46)8 transfer motion and no other motions.9 Anything else?10 And -- Im sorry, in the pending, at least the11 (indiscernible - 4:40:00) Im going to hold the trustee12 motion in abeyance.13 MR. HARRIS: Thats fine, Your Honor.14 Thank you.15 THE COURT: Okay.16 MR. SAMIS: Your Honor, this is Chris Samis.17 For the record, just to be absolutely clear, we do18 actually have a pending motion to seal in connection with19 our venue motion, so I would ask that that be heard at the20 hearing, as well.21 THE COURT: Well, I was about to say that.22 UNIDENTIFIED SPEAKER: (Indiscernible - 4:40:19)23 Your Honor, with respect to certain matters that were24 contained in our statement in support of trustee motion.25 MR. HARRIS: Your Honor, I dont think theres any VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 271 opposition from either side to those -- Chris, unless you2 guys have some issues with ours -- so we might be able to3 submit orders and not -- and avoid a hearing on those.4 THE COURT: All right. Well, heres where well5 go with that. I was about to say this actually, but I6 appreciate being reminded.7 To the extent there are (indiscernible 4:40:46)8 confidentiality or seal of motions, obviously, well hear9 those motions in relation to the venue motions, and if there10 arent any objections and you want to send out a stipulated11 order, thats fine with the Court; however you want to play12 it.13 But lets limit it to the venue motion and the14 related file under seal motions, et cetera.15 MR. SAMIS: Thank you, Your Honor.16 Ill -- well discuss that with Mr. Harris and17 well get it worked out.18 MR. HARRIS: All right. Great. Thank you.19 THE COURT: Very good.20 Anything else?21 MR. BUCHBINDER: Your Honor, this is Dave22 Buchbinder, again.23 It might be -- Im sort of concerned about 1014(b)24 here, as I know everyone else is, and I wouldnt want25 everyone to end up in another forum and fighting about what VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 281 applied here or didnt apply here.2 It seems to me that that threshold issue in the3 venue motion is whether or not Rule 1014(b) applies based4 upon the comment that we maybe are not dealing with the same5 debtor.6 If the Court were to find that we werent, then we7 wed be looking at what Ill call a traditional change of8 venue motion, the motion that was filed. But if the Court9 were to find that one of the four types of entities10 described in Rule 1014(b) is the -- and type of entity were11 dealing with, I think the rule doesnt give the Court any12 discretion except to move the case back to Atlanta.13 So we might want to deal with 1014(b) first, and14 as further backup, the parties might all want to agree, and15 at least for purposes of the venue motion, theyre not going16 to invoke this rule or the Court may want to independently17 consult with Judge Mullins, who may want to issue an order18 allowing this Court to rule on the venue motion so that the19 record is clear and that a lot of unnecessary time is20 perhaps not wasted downstream litigating these matters.21 Its just a suggestion.22 THE COURT: Well, Im not at all sure that I agree23 that if theres a pre-existing case there is no choice but24 to transfer venue. Im not sure I agree with your25 interpretation of the statute. VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 291 And the point I was trying to make in connection2 with the hearing is that I intend to consider the 10143 issues in connection with the venue transfer motion, but I4 think I have to do so based on the facts, and it sounds to5 me like there may be a factual issue at play here about6 1014.7 If I find that I have a situation where theres a8 pre-existing case and that Judge Mullins, or whoever has9 that case has the decision, I mean, I think it would be10 nonetheless helpful to combine the motions, because if I11 decide no then I can decide it on the merits; if I decide12 yes I can kick it to Judge Mullins, but I can also make,13 perhaps, observations that he would find helpful.14 So Im going to have the whole hearing the same15 day, okay?16 MR. BUCHBINDER: Well, I wasnt -- this is Dave17 Buchbinder.18 I wasnt suggesting to not have the hearing the19 same day.20 THE COURT: Oh, okay.21 Thank you, Im sorry. I --22 MR. BUCHBINDER: I was just simply suggesting that23 in terms of order, the 1014(b) issue might be first.24 THE COURT: Well, thats something for the parties25 to work out in how theyre going to run their hearing, but I VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 301 certainly would hope that the parties -- and I know they2 will, because I know you all -- will figure out a3 professional and logical way to do it.4 Okay. So the hearing will be May 31st at5 2:00 p.m.6 Responses due by 5:00 on the 29th, which is7 Tuesday.8 All right. Anything else?9 All right. Were adjourned.10 MR. HARRIS: Thats it from the petitioning11 creditors, Your Honor.12 Thank you.13 THE COURT: Okay. Were adjourned then.14 Thank you.15 MR. KELLEY: The debtors thank you, Your Honor.16 MR. BUCHBINDER: On behalf of the U.S. Trustee,17 thank you, Your Honor.18 (Whereupon these proceedings were concluded at19 4:44 P.M.)202122232425 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • ALLIED SYSTEMS HOLDINGS, INC. Page 311 C E R T I F I C A T I O N23 I, William J. Garling, certify that the foregoing transcript4 is a true and accurate record of the proceedings.56 William J. Digitally signed by William J. Garling DN: cn=William J. Garling, o=Veritext, Garling ou, email=digital@veritext.com, c=US Date: 2012.05.25 15:15:20 -040078910 Veritext11 200 Old Country Road12 Suite 58013 Mineola, NY 115011415 Date: 5/24/201216171819202122232425 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400
  • UNITED STATES BANKRUPTCY COURT District of DelawareIn Re:Allied Systems Holdings, Inc.2711 Centerville Road Chapter: 11Suite 400Wilmington, DE 19808 EIN: 58−0360550 Case No.: 12−11564−CSS NOTICE OF FILING OF TRANSCRIPT AND OF DEADLINES RELATED TO RESTRICTION AND REDACTION A transcript of the proceeding held on 5/22/2012 was filed on 5/25/2012 . The following deadlines apply: The parties have 7 days to file with the court a Notice of Intent to Request Redaction of this transcript. Thedeadline for filing a request for redaction is 6/15/2012 . If a request for redaction is filed, the redacted transcript is due 6/25/2012 . If no such notice is filed, the transcript may be made available for remote electronic access upon expiration of therestriction period, which is 8/23/2012 unless extended by court order. To review the transcript for redaction purposes, you may purchase a copy from the transcriber (see docket forTranscribers information) or you may view the document at the clerks office public terminal. Clerk of CourtDate: 5/25/12(ntc)
  • Notice RecipientsDistrict/Off: 0311−1 User: Brandon Date Created: 5/25/2012Case: 12−11564−CSS Form ID: ntcBK Total: 7Recipients of Notice of Electronic Filing:ust United States Trustee USTPREGION03.WL.ECF@USDOJ.GOVaty Christopher M. Samis samis@rlf.comaty Christopher M. Samis samis@rlf.comaty Mark D. Collins collins@rlf.com TOTAL: 4Recipients submitted to the BNC (Bankruptcy Noticing Center):adb Allied Systems Holdings, Inc. 2711 Centerville Road Suite 400 Wilmington, DE 19808aty Ezra H. Cohen Troutman Sanders LLP Bank of America Plaza 600 Peachtree Street Suite 5200 Atlanta, GA 30308−2216aty Jeffrey W. Kelley Troutman Sanders LLP 600 Peachtree St. NE, Suite 5200 Atlanta, GA 30308 TOTAL: 3